Stake+ Concept for Hedera

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Stake+
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Introduction
Stake+ is a new product from Stader that leverages native staking on Hedera and Stader’s existing HBARX product to offer higher returns and DeFi participation to HBAR holders with no/limited smart contract risk on their investment.

Product Mechanics

Diagram2
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Instead of choosing a node for protocol staking, users will choose to stake to the Stader Stake+ contract, which in turn will stake to a node. The node will be selected to optimize yield for the users.

The staking rewards will be collected on the Stader Stake+ contract and converted to HBARX. These HBARX can then be withdrawn by the users at a suitable time or be used in an appropriate DeFi strategy.

Advantages of using Stake+
There are several advantages to using Stake+

  1. Higher Base yield: Stader optimizes the node on which the HBAR is staked, hence ensuring the highest possible yield for staking. In addition, the rewards generated are then converted into HBARX which offers a higher yield than native staking

  2. Auto-compounding: Users with less than 100k HBAR, will incur significant transaction costs if they were to manually conduct transactions in order to receive staking rewards or they stand to miss out on extra yield associated with auto-compounding

  3. Decentralization and Participation in DeFi: By using Stake+ users promote decentralization of the network as Stader actively manages the node to which the funds are staked. In addition, users also get a chance to participate in Hedera’s growing DeFi ecosystem without any smart contract risk to their principal HBAR investment

  4. Tax Efficiency: As the rewards are converted to HBARX and are stored in the Stader Stake+ smart contract, users can choose a tax-efficient time to move their earnings (either in HBARX or any other token) back into their wallets

Key target demographics
Small retail (<100k HBAR holders)
Retail users holding less than 100k HBAR stand to lose a significant portion of their rewards to transaction costs if they choose to auto-compound manually. Most of these users do not transact on a daily basis, hence auto-compounding would require an additional transaction to be done, incurring a transaction fee

Table 1:Illustrative returns from staking for a user with 50k HBAR
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Large token holders (>10Mn HBAR holders)
Large token holders such as institutions and early employees stand to benefit from using the Stake+ solution as

  • Auto-compounding + DeFi increases the overall yield achieved
  • Tax efficiency offered by Stake+ can have a significant benefit for effective returns
  • Some of the HBAR maybe locked in a vesting or other contracts and hence cannot be easily separated from the returns
  • Lower operational costs

Summary
Below is a comparative summary:

Hbarx Table
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Appendix
Objective:
Stader is a trusted liquid staking solution for HBAR supported by The HBAR Foundation. It lets users earn staking rewards on their HBAR and enables participation in DeFi strategies through its liquid staking token, HBARX. Stader staking on Hedera gives you:

  • Instant Liquidity: Users can participate in DeFi using the liquid token, HBARX
  • Ease of staking: User-centric design of dApp to make staking seamless for users

Stader’s Hedera liquid staking solution is battle tested and has 1.40 Bn+ HBAR staked in ~5 months of launch. To provide DeFi opportunities for HBARX, Stader has already partnered with Saucerswap, HeliSwap, and HeadStarter.The HBARX token is also gaining adoption by major NFT marketplaces, gaming protocols, and music streaming apps within the Hedera ecosystem.

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There is a suggestion that some nodes will have a different staking percent payout then others and hence Stader will optimize that.
How is it that some nodes will have a different percentage for staking?